Rebeca Grynspan: Global Launch of the HDR 2011

Remarks for Rebeca Grynspan,UN Under-Secretary-General and UNDP Associate AdministratorAt the Global Launch of the HDR 2011
Brussels, 10 November 2011

Introduction

It is a pleasure to be returning this year to Brussels and to be launching the 2011 Human Development Report, “Sustainability and Equity: A Better Future for All”.

Over the years, the annual Human Development Reports have addressed a range of pressing global challenges, and have reaffirmed that development is about enlarging people’s choices and capabilities and therefore results and success should be judged not by growth and GDP, but by its impact on people’s lives.

This year’s Report is no different. It addresses the central challenge of the 21st century:

How can development progress continue in ways that will raise living standards for all countries and all peoples, without harming the environment? Because if we harm the environment this in turn will harm the possibilities of raising the living standards of all countries and all peoples.

As world leaders prepare to meet in Durban this year and in Rio de Janeiro in June 2012, for the UN Conference on Sustainable Development, the Report we hope can offer new insights to the international dialogue and can inform the policy debates. The Rio + 20 Summit offers a critical opportunity for the world community to put sustainability and equity concerns at the heart of a post-2015 international development agenda, and the European Union is already deeply involved in the preparatory discussions needed to make Rio a success.

The Report’s core argument is that equity and sustainability are inextricably linked and should be seen as two mutually reinforcing objectives. This is also the message that we should bring to Rio to recommit to sustainable development based on socially and environmentally responsible growth that allows to accelerate the reduction of poverty and inequality.

As you may recall, when I presented the 2010 Human Development Report in Brussels a year ago, I emphasized the remarkable gains in health, education and income over the last four decades, particularly in the world’s poorest countries. This year’s Report is forward looking; it makes a set of projections for how our world will look over the next four decades.

HDR Projections to the year 2050 suggest that under the unlikely scenario of no further environmental degradation, the global HDI would be 19% higher by 2050 than it is today –that is more or less what we have seen between 1990 and 2010-; this is our “base case” and also the “best case scenario”. As you can see in slide 1, in the best case scenario developing countries would see the largest gains, with a 24% increase. Importantly, the projections suggest that HDI in Sub-Saharan Africa would increase by 44% and in South Asia by 36 %.

But the Report also has a sobering central message: this progress won’t happen unless we take bold steps today to avert future environmental calamities and ensure no further environmental degradation, and to reduce deep inequalities within and among nations. This will require a coherent policy framework for sustainable development at the global level. This policy framework needs to be centered on a commitment to achieve the Millennium Development Goals, including ensuring gender equality and access to reproductive health services and combating HIV/AIDS, as well as improved trade conditions, and the mobilization of the necessary resources to keep AID commitments and the additionality demanded by climate change and adaptation.

The projections include two worse scenarios that take into account these threats and the risk of policy inaction:

Under the scenario of “environmental challenges”, which includes among others the impact of global warming on agricultural production and environmental challenges related to water, sanitation and pollution, as well as growing inequality and other related consequences such as a higher probability of intrastate conflict, the increase in global HDI is predicted to be 8% lower than in the “base case” overall, and 12 % lower in South Asia and Sub-Saharan Africa.

Under an even more adverse “environmental disaster” scenario, which amplifies the magnitude of the impacts modeled, the global HDI would be 15 percent below the projected baseline in 2050. Importantly, in this scenario the most dramatic impact would be in developing countries. Sub-Saharan Africa human development would be 24% below the projected baseline, and South Asia, 22 % lower.

If we do not act, the convergence in human development observed over the last 40 years could be reversed. This point is clearly visible in this figure: in the base case inequality among countries will continue to decrease, however with environmental challenges more adversely affecting poorer countries, existing inequalities among nations may persist. In the worse scenario inequality would widen again (highlighted by the upturn in the slope after 2035).

The greatest impact on HDI would be due to stagnation in global life expectancy and small increases in GDP per capita in lower HDI countries under the environmental disaster scenario.

At the same time, we might expect that increasing global inequalities would be mirrored in deepening inequalities within countries as well. As shown in this figure, loss in HDI due to inequality in education, health, and income, is highest in low HDI countries (at 33 %) and less in very high HDI countries (at 11%). Although income inequality is high across the globe, this result is driven primarily by greater inequalities in health and education in lower HDI countries than other countries. An increase in inequality globally, may therefore exacerbate and compound this situation.

Key Messages
The Report delivers several key messages:

First, that those groups and individuals that are already disadvantaged bear the harshest repercussions from environmental deterioration. They carry a “double burden” of exposure to environmental risks, both in their immediate home environment from air and water pollution, and from such long-term global trends as extreme weather hazards and rising sea levels. For example, preventable diseases directly linked to contaminated water and polluted air claim the lives of about three million children under five every year, mostly in Africa and South Asia; the equivalent of the entire under-five populations of Austria, Belgium, the Netherlands, Portugal and Switzerland combined.

According to this year’s Report, some 1.7 billion people in 109 countries are living in ‘multidimensional’ poverty, a figure significantly larger than the 1.3 billion people estimated to live on or below US$1.25 a day. But the report also explores the pervasiveness of environmental deprivation among the multidimensional poor – focusing on lack of improved cooking fuel, drinking water and sanitation – and the extent of overlap at the household level. Of these 1.7 billion people, nearly 90% lack access to modern cooking fuels, 80% lack access to adequate sanitation, and 35% lack access to clean water.

And there is significant overlap in the deprivations, with 80% experiencing two or more deprivations and 29% facing all three. There is however, significant regional variation in the experiences of the poor as shown in this graph.

The second key message tells us that major disparities in power shape these patterns of deprivation at the global and local levels. For example, studies in the United States show that toxic waste facilities are disproportionately located in working class and minority neighborhoods, resulting in harmful effects on health and education. But we also see that empowering communities can have a positive impact on the environment. The Report cites a study of 61 countries which showed that the per capita number of women’s and environmental NGOs is negatively correlated with lower rates of deforestation.

So another message from the report is that traditional methods of assessing environmental policies should be strengthened to examine the differentiated impacts related to inequalities. For example, although traditional methods might expose the impacts on the path of future emissions, they are often silent on distributive issues – and this is where we need to pay more attention.

Another key message of the Report is that we will need innovative new approaches to development financing. Estimated funding needs in poorer countries for environmental protection greatly exceed current ODA levels at$130 billion annually. For example, the Report highlights that the lowest estimate of the total annual mitigation and adaptation costs to address climate change by 2030 is $249 billion, and to achieve the MDG water and sanitation targets the report reflects estimates that range from $6.7 billion a year to $75 billion. Current funding for climate change adaptation and mitigation stands at only eleven percent of the lower bound of estimated needs, while financing for low-carbon energy production is only two percent of the lowest need estimate. Available funding for water and sanitation is closer to that required, but this is partly because funding needs are relatively small. More public as well as private investment is urgently needed; public funding alone is not able to provide the necessary resources for the investment required but also it is true that market forces alone will not suffice in solving the critical problems we face.

The Report advocates possible new public financing mechanisms, which merit serious consideration. This includes a new currency transaction tax as a major innovative source of finance. The infrastructure to support such a tax is in place and even a small levy would generate substantial sums- a tax of only 0.005 percent on currency trading, for example, could yield some $40 billion annually, an amount that could be used to address critical needs in social and environmental protection.

There may be other viable international funding options. For example, developed countries have committed to raising annually $100 billion of climate finance by 2020 and this financing can create a tipping point from which to catalyze much larger scale private investment for climate change adaptation in developing countries. International public climate finance can be used to build robust policy environments and bring together diverse stakeholder groups. By so doing, developing countries can actively encourage public private partnerships which will help transition to a pro-poor low-emission climate-resilient society.

Win-win-win solutions

The final key message of this year’s Report is forward looking and highlights the importance of finding positive synergies between policies that promote both sustainability and equity. All countries and communities have the right to pursue high levels of development; and there are viable policy alternatives to the resource intensive economic engines of the past century. New approaches to land use, energy generation, and transportation are essential and the Report makes concrete suggestions that countries can build on.

For example, the report highlights an example from my own country, Costa Rica, suggesting that forestry legislation of the late 1980s and active participation by civil society and investment in opportunities related to sustainable practices in sectors such as tourism, promoted a path to sustainable growth.

One important proposal that fulfills the win-win-win requirement is the UN’s new “Sustainable energy for All” initiative. The proposal is ambitious: to provide electricity to the one and a half billion people who now live entirely off the power grid. As the report points out, we could get electricity to those one and a half billion people for about one-eighth of what we are already spending on fossil fuel subsidies worldwide. We could do this with existing clean technology and without causing even a one-percent rise in global carbon emissions.

We know that basic electricity has an immediate impact on poor households: it allows school children to do homework at night and families to heat their homes and cook without being exposed to indoor smoke from solid fuel which contributes to 2 million deaths a year and contributes to climate change and deforestation.

Rankings and Indices

As in previous years, the 2011 report includes a detailed ranking of countries based on the Human Development Index. Notably this year, the report covers a record 187 countries and territories up from 169 in the 2010 report.

As you have seen, Norway, Australia and the Netherlands lead the world in the 2011 Human Development Index (HDI), while the Democratic Republic of the Congo, Niger and Burundi are at the bottom of the rankings. It is the lower ranking countries that particularly deserve our attention.

The three new indicators introduced in the 2010 report – the Inequality-adjusted Human Development Index (IHDI), the Gender Inequality Index (GII) and the Multidimensional Poverty Index (MPI) – are retained in the 2011 report, and offer a more nuanced understanding of what is captured by the rankings. We discussed these indicators in detail last year, here in Brussels, and my colleagues will present changes in rankings when we use these measures in detail.

Conclusion

In closing let me stress: 1) For Rio+20, the need to bring the development and the economic actors on board. Sustainable development is not a choice between continued human development progress and environmental preservation. 2) These are in fact one and the same goal. We must integrate equity into the design, implementation, and monitoring of policies. 3) Help bridge the gap that separates policy-makers, negotiators and decision-makers from the citizens most vulnerable to environmental degradation by increasing accountability. Giving the poor and marginalized, including women and indigenous people, a voice in decision making processes at local, national and global levels is valuable in and of itself, but it is also a prerequisite for ensuring equitable and sustainable human development.

The Report argues persuasively that the technology is there, good policy models are there, and the resources are potentially there as well. As we move toward Rio+20, we must highlight the urgent need to change our production and consumption patterns in order to prevent further environmental degradation.

I hope this 2011 Report will help us all find new ways to move forward, working together for a better future for all.